Foreign buyers boost Spanish real estate market

Foreign buyers were one of the main drivers of the Spanish housing market in the first quarter of the year, accounting for nearly 20 percent of all sales.

According to research published by the Spanish General Council of Notaries on Monday, residential property sales to foreign buyers jumped by 27.2 percent year-on-year and constituted "one of the main engines of growth" in the market.

Coastal areas were the most in demand. Together with the Spanish capital of Madrid, they registered the highest year-on-year growth of any region, at over 40 percent.

British buyers were the biggest players, representing 13.8 percent of the foreign market, followed by the French (10.5 percent) and Russians (8.4 percent). Meanwhile, buying from Ireland shot up by a hefty 78.0 percent year-on-year.

However, the report highlighted increasing numbers of buyers from more far-flung countries. Perhaps bolstered by Bill Gates and George Soros's recent major stakes in Spanish real estate, buying by U.S. citizens surged by 88.9 percent year-on-year – although sales to Americans still totaled only 1 percent of the foreign market.

In addition, Chinese purchases recorded a massive yearly increase of 83.1 percent.

After Spain joined the euro, the country experienced a long boom, underpinned by a housing bubble financed by cheap loans to builders and home buyers. However, its real estate market was hit hard by the global financial crisis of 2007/08 and prices continue to decline.

In the first three months of this year, prices fell by 6.7 percent year-on-year. This means house prices are 39.7 percent lower than at their peak in the last quarter of 2007, according to property valuation firm Tinsa.

But investors are increasingly looking at Spain's real estate. In its 2014 "Emerging trends in real estate: real estate returns" report, financial services firm PwC wrote that Spain was the European market to watch, having switched to "good opportunity" from "no-go" last year.